In order to maximize profit, manufacturers look for ways to reduce manufacturing costs without sacrificing productivity. Many companies implement lean manufacturing as a powerful cost-cutting measure. Essentially, lean manufacturing means removing inefficiencies in the production process: unnecessary work, unevenness in production, maintenance issues and so on. By cutting out these non-value-adding processes, manufacturers can focus more resources on actually creating products and substantially improve their profit margins.
History of Lean
Lean manufacturing per se is a relatively new methodology, but its origins stretch back hundreds of years. Benjamin Franklin, a well-known early proponent of waste reduction, noted that eliminating unnecessary costs could be more profitable than increasing sales. More than a century later, Henry Ford applied Franklin’s ideas to the manufacturing sector. For instance, he pioneered just-in-time manufacturing, a method that reduced carrying costs by eliminating as much inventory as possible. Although Ford’s implementation of cost-cutting processes proved to be unsustainable once the company moved beyond the venerable Model T, his early successes greatly influenced later lean manufacturers. The modern principles of lean manufacturing are derived mostly from the Toyota Production Systems; in fact, some manufacturers use the term “Toyotism” to describe the same methodology. John Krafcik, a former Toyota quality engineer, first coined the term in 1988. Toyota’s philosophy focuses on eliminating three types of inefficiency: non-value-adding work, overburdening of workers and unevenness in productivity over time. Lean manufacturers use a systematic, factory-wide approach to identify sources of waste and eliminate them by reorganizing equipment, establishing clear best practices and training workers to consistently use those practices.
The 5 Principles of Lean
Specify value from the standpoint of the end customer by product family.
- Identify all the steps in the value stream and eliminating whenever possible steps that do not create value.
- Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.
- As flow is introduced, let customers pull value from the next upstream activity.
- As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, then begin again until the waste is eliminated.
Two Approaches Define Lean Manufacturing
First, manufacturers attempt to eliminate unnecessary movement, wasted materials, needlessly time-consuming procedures and other sources of waste. This approach typically involves physically reorganizing the factory environment as well as improving the efficiency and reliability of machines and equipment. Second, manufacturers try to improve the evenness or “flow” of production to keep input and output consistent over time. This system, called production leveling, focuses on producing intermediate products at a constant rate so that later steps in the manufacturing process can also be carried out constantly and predictably. Both of these approaches allow manufacturers to meet demand efficiently and avoid wasting resources.
Eliminate Non-Value-Adding Movement
Lean manufacturers often attempt to eliminate non-value-adding movement; that is, situations in which workers must move themselves or their materials from one location to another instead of directly engaging in value-adding manufacturing processes. One early pioneer of this type of lean manufacturing was motion efficiency expert Frank Gilbreth, who observed masons lowering and raising their entire bodies to pick up single bricks from the ground. Gilbreth’s introduction of a waist-high scaffold eliminated this unnecessary movement, allowing masons to work about three times as quickly with less effort. In modern factories, this same principle led to the creation of U-shaped cells, which connect various sub-processes arranged in a logical order around the workstation. The worker stands in the center of the U and simply turns his body as items move from sub-process to sub-process. Instead of wasting time and effort walking from station to station, the worker can put all of his energy into activities that actually get the product closer to completion. This simple innovation eliminates non-productive movement and improves efficiency in the workplace. Manufacturing is a complex process in which many steps need to be followed in a particular order. An interruption at any stage of production can cause a backup throughout the entire factory. One of the most common sources of interruptions in a manufacturing setting is the loss or misplacement of tools. Thus, lean manufacturers use efficiently designed tool holders to make sure workers always have access to the equipment they need. Tools are stored within easy reach, again helping to eliminate non-value-adding movement. Lean manufacturers also keep backup tools stored at automated stations so that any interruptions can be eliminated immediately.
Delivery of Parts to Workstations
Another area in which lean manufacturers seek to cut costs is the delivery of replacement parts to workstations. In order to minimize interruptions, parts need to be readily available and need to be loaded from outside the work area. Although traditional boxes and bins work for many applications, the most efficient devices used in lean factories are gravity fed conveyors. These simple devices use gravity to bring parts within a worker’s reach area and, if necessary, eliminate scrap metal or other waste material with no need for the worker to leave his station. Since they are powered by gravity, these conveyors also eliminate unnecessary energy costs. Lean manufacturers not only seek to improve the physical efficiency of the processes in their factories, but also adjust their production to meet demand, thereby reducing carrying costs without sacrificing sales. Because demand often varies seasonally, lean manufacturers attempt to fit their production to the average demand and maintain a small inventory to cover the difference between the average and peak demand. For instance, if demand ranges from 400 to 600 units monthly, a factory may be set to produce 500 units per month and maintain an inventory of 100 units in preparation for high-demand months. Done properly, production leveling eliminates the cost of storing unnecessary inventory and keeps production steady and reliable over time.
Companies Implementing Lean
Toyota is arguably the most successful company to have implemented lean manufacturing, but every company in every industry can benefit from a lean philosophy. The longer and more complex the manufacturing process, the more the manufacturer stands to gain by eliminating non-productive activities. As such, lean manufacturing is most frequently seen in factories that produce automobiles, heavy equipment and other complex devices. Although the methodology of lean manufacturing was developed in a factory setting, the lean philosophy can be applied to any aspect of any business. Engineers can be encouraged to use inexpensive, efficient components rather than familiar ones; scientists can “think lean” when researching and developing new products. Even management and financial staff can use lean organizational and accounting procedures to make their own aspects of the business as efficient as possible. With lean leadership, any company can eliminate waste and improve its bottom line.
Common Lean Manufacturing Questions
There are many common questions that come up when a company is trying to implement Lean Methodology into their work flow. Below are some common questions about Lean with answers.
- How do I get started? Every core lean principle applies just as strongly, if not more so, beyond the shop floor. In fact, many of the most exciting breakthroughs are taking place in areas such as services, healthcare and government.
- What are the most common mistakes in implementing lean? To start with, lean must never be seen as a tool for headcount reduction or mindless cost-cutting. This fundamentally misses the purpose of lean, which is to create value through eliminating waste. As companies improve their processes they should be able to reallocate their productive resources to new value-creating work.
- How does lean compare to other improvement processes such as Six Sigma? While there are many specific differences among the different schools of thought, Jim Womack cautions against getting lost in the competing schools. For veterans of each practice often get lost in finely detailed arguments over technical or even philosophical differences.
- How do I convince my leaders and associates to practice lean? “One of the most powerful insights from Womack and Jones is that lean is not simply a toolbox, but a total perspective. In other words, you must trust people to solve their problems, regardless of the way the problem has been defined.